Industry News

From indie to franchisee

“It seems to me that the lone, independent hobby store is an endangered breed,” said Fred Beardslee, a 20-year hobby shop veteran and owner of Colpar’s HobbyTown USA in Aurora and Lakewood, Colo.

That’s why Beardslee made the move in the summer of 2012 to convert his two stores, formerly known as Colpar Hobbies and Colpar Hobbies West, to HobbyTown USA locations.

“I got the feeling that in the future you’re really going to have to be part of a larger group for a variety of reasons,” he said. “You just need to be part of something bigger than you are.”

Beardslee acquired the Colpar Hobbies stores from his former boss in 2010 after working at the hobby shops for years. He, like many hobby retailers, had taken notice of the industry’s shrinking profit margins. Plus, Beardslee quickly found it difficult to promote his independent stores in the suburban Denver market.

Then in March 2012, he was approached by a local HobbyTown USA owner, who mentioned that the franchise was looking for independent stores that were interested in converting and that Beardslee should look into the possibility. That was as far as the idea went for a while, but eventually he contacted HobbyTown USA officials to see what they had to offer.

“The more I looked, the more I liked,” Beardslee said.

Colpar Hobbies wasn’t necessarily in danger of closing, he said. But the two stores’ growth was flat, and as their margins continued to dwindle, Beardslee began to grow concerned.

So he decided to be proactive. “To get the business viable going into the future, I really had to do something radically different,” he said.

As Beardslee began the process of converting his stores to HobbyTown USA stores, he said the franchise provided plenty of guidance. HobbyTown USA offered suggestions on everything from store layouts to products to stock based on national sales figures. What was essential for Beardslee, however, was that these suggestions were just that. They were not mandates. “They really give you an amazing amount of free rein,” he said.

The sign above his stores now reads Colpar’s HobbyTown USA. Beardslee would not let the sign say solely HobbyTown USA. Colpar Hobbies has been an establishment in the area since 1969, and he was adamant that the Colpar name remained.

“Quite honestly, the fact that they allowed me to retain the Colpar name — had they not been willing to do that, that probably would have been a deal breaker in my mind,” he said. “They were very willing to allow me to maintain that portion of my name on my sign and everything else. I think that speaks a lot for what they’re trying to do.”

For Beardslee’s stores, the benefits to becoming HobbyTown USA locations have been numerous.

His stores benefit from HobbyTown USA’s national advertising, which he said doesn’t work to sell products direct to the consumer but rather directs the consumer to local HobbyTown USA locations. The franchise also provided Beardslee’s store with a stipend for more direct, local advertising.

Being a HobbyTown USA franchisee also affords certain buying advantages that help increase Beardslee’s profit margins, he said. HobbyTown USA stores have access to several exclusive product lines, such as the Ares R/C aircraft products and the Helion surface vehicles. The franchise also has a buyers club where franchisees may purchase products at a lower cost. Some distributors even offer rebates to HobbyTown USA stores, he said.

Another reason Beardslee made the conversion was to take advantage of HobbyTown’s proprietary point-of-sale system. He said his stores were already in the midst of looking at a new POS system, but HobbyTown USA provided the technical support for an easy transition. HobbyTown USA even helped his staff take inventory of the entire store.

Beardslee said he is still free to set his own pricing structure, but having access to HobbyTown USA’s national sales data has been invaluable for that task. He did, however, have to upgrade some of the computer hardware at his stores in order to support the new POS system.

During the conversion process, he decided to delay converting the former Colpar Hobbies website to a traditional HobbyTown USA website.

But Beardslee has taken advantage of the accounting help provided by HobbyTown USA. He used to hire an outside accountant, but now he just sends all of his invoices to HobbyTown USA and the company cuts checks based on when the invoices come due, he said. The checks are sent back to him, then he signs them and sends them out to the various vendors.

“That’s a huge time saver,” he said.

Beardslee said he was somewhat fortunate in that at the time of the store conversions he was already in the process of relocating his Aurora store to a new, bigger location. Basically, after the move when his Aurora location reopened, it reopened as a HobbyTown USA store. But it was not difficult for his Lakewood store to undergo the conversion while staying at the same location, he said.

Although Beardslee, 59, has only owned the stores for a few years and is still looking to grow his business, he said he made the decision to convert the stores partly with his retirement in mind. “I think a business as part of a franchise is a much more marketable entity,” he said.

“I would suggest anybody look into it,” Beardslee said of converting from an independent hobby store to a HobbyTown USA store. “They’ll have to make their own decision based on their business and business model and everything else. But I definitely would recommend to anybody to at least take a serious look at it.”

Have you considered becoming a franchisee of a hobby store chain? Why or why not? Send us a letter to the editor and let us know. Email editor@modelretailer.com.